US Earning Season Lifts Brazilian Stocks

Brazilian stocks ended higher, thanks to bargain hunting activity and despite worries amid the start to the U.S. earnings season. The U.S. market tumbled amid investor nervousness ahead of Intel’s earnings report, due out after the close.

Brazil’s benchmark Bovespa Index rose 77.98 points, or 0.32%. Brazilian shares rose somewhat, on bargain hunting following recent sharp declines.


Following concerns over monetary tightening that plagued shares last week, according to analysts, investors continue to await the Central Bank’s January meeting on interest rates, scheduled for next Tuesday and Wednesday.


The bank is expected to raise the benchmark Selic interest rate by an additional 25 or 50 basis points from its current 17.75%.


Trading could be volatile during the remainder of the week, as next Monday marks the expiry of options contracts, with investors likely to focus heavy volume around key strike prices of blue chips.


In economic news, Treasury Secretary Joaquim Levy said President Luiz Inacio Lula da Silva, after cutting spending in his first two years in office, will hold off on further reductions this year due to an economic slowdown.


Levy’s comments reflect a policy shift for Lula’s administration, with Levy noting that the government’s priority is to keep Brazil’s economy growing. He said that Brazil’s economic expansion will slow to 4% this year from 5% in 2004.


Turning to research, a major investment bank lowered its rating on Brazil’s banking sector to “market underweight” from “market weight,” stemming from high valuations.


The bank explained that the revision comes in spite of a reduction in the sovereign risk spread outlook and solid growth estimates, as there is “limited upside potential we see for stock prices based on our fundamental valuation methodology.” 


Also, Banco Itaú was cut to “peer perform” from “outperform” amid “a limited upside potential.”


Additionally, Brazilian steel firm Gerdau was active, after an analyst downgraded the steel industry to “underweight” from “market weight,” saying the gains made in 2004 are unlikely to be repeated this year.


Thomson Financial Corporate Group
http://www.thomsonfinancial.com/


PRNewswire

Tags:

  • Show Comments (0)

Your email address will not be published. Required fields are marked *

comment *

  • name *

  • email *

  • website *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Ads

You May Also Like

Analysts Upgrade Forecast for Brazil’s Surplus to US$ 38 Billion

The good performance in Brazilian exports in the beginning of the year has caused ...

Show Me One Pro-American Brazilian. Only one!

The entire mainstream Brazilian media, without exception, is anti-American, anti-Bush, and anti-Israel, including those ...

Disarming Brazil

Nine out of 10 homicides in Brazil are committed by handguns, and contrary to ...

Brazil Starts Year by Burning 130,000 Pirated DVDs and CDs

Around 130,000 counterfeit products, CDs and DVDs, were destroyed by municipal urban control agents ...

Brazil Olympics: Virus Infested Faeces Main Culprit of Guanabara Bay Pollution

Sewage, garbage and oil leaks. These are the main problems faced by the balmy ...

Brazil’s Black Monday Brings Market Down 5.43% and Dollar Up 7.53%

It was another black Monday in the Brazilian stock market, this October 6. São ...

Analysts Lower Expectations to a 3% GDP in Brazil

The stagnation of the Brazilian domestic economy in the second half of the year ...

Brazilian industry

Who Is Really Afraid of the FTAA? Brazil’s Big Business

Although every Latin American government pays lip service to integration, taking the concrete steps ...

Number of Jobs Up 3.5% in Brazil, But Real Wages Grow a Meager 0.1%

The salary mass of Brazilian families rose 3.6% between April and June, in comparison ...

Brazil on the Verge of Becoming World’s Largest Food Supplier

The Brazilian food industry is doing well. As well as the country currently being ...